The Hindu : Tamil Nadu / Chennai News : Industrial estate owners resent penalty

Online edition of India's National Newspaper
Monday, Sep 04, 2006

Tamil Nadu

Tamil Nadu - Chennai

Industrial estate owners resent penalty

K. Manikandan

SIDCO is at fault, say aggrieved parties

TAMBARAM : Owners of small and medium units at the Tamil Nadu Small Industries Development Corporation (TAN SIDCO) at the Tirumudivakkam industrial estate near Pallavaram have protested the penalty levied by the Corporation for non-utilisation of plots they had purchased.

A number of unit owners in the estate have received penalty notices from SIDCO as they failed to abide by the conditions of the agreement at the time of buying the plots. Industrialists began to purchase plots in the estate from the late 1990's onwards.

One of the conditions was they should build their factory and commence production within two years after taking possession. As most unit owners started production only about three years ago, the SIDCO has pulled them up for not utilising the plots they had purchased in the late 1990's.

The penalty clause was mentioned neither in the memorandum of understanding or the allotment order. They could not move into the estate for some years as SIDCO did not hand over developed plots. And when they did, they spent a large sum to make roads motorable apart from telephone connectivity, water and power supply. Further, handing over charge were given to them only from 2000 onwards and they commenced their operations within the stipulated time.

A large amount of their resources and time was spent visiting government offices to receive No Objection Certificates, plan approvals, temporary power connections and to complete other formalities. SIDCO officials said penalty was levied as many indulged in speculative buying of land, purchasing plots when they were about Rs. 15 lakhs an acre, leaving them idle and selling them to other industrialists when the market value was Rs. one crore an acre.

They said that in 2006 alone, about 21 owners had transferred the land they had purchased some years ago. The penalty amount too was meagre considering their scale of operations, they added. The estate is spread over 200 acres and all 460 plots have been bought. At present, 140 units are functioning and another 40 were under construction, while the rest were vacant, officials said, justifying their decision that industrialists were literally using SIDCO's property as a real estate venture.

Industrialists had agreed to abide by the policies of SIDCO as and when it changed, officials said. Officials said SIDCO only sold plots to industrialists and it was not within their powers to take them back if owners were unable to run their units.

Industrialists reacted sharply stating there were some basic flaws in SIDCO's policies as they permitted people to purchase land when price was low and sell them when years later it shot through the roof. SIDCO should regulate this practice instead of penalising those who had come to this estate in the hope of a single window clearance and the necessary infrastructure in place.

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